Six months ago, Avianca successfully reorganized under Chapter 11 of the US bankruptcy code, thereby becoming the first non-US airline to use the process to restructure its financial obligations. But the Colombian flag carriers journey through Uncle Sams legal system, which ended on Dec. 10, 2004, has done far more than add a footnote to American business law.
Ryanair reported an adjusted net profit after exceptional costs and goodwill of €268.9 million ($330.9 million) for the financial year ended March 31, a 19% increase compared to the adjusted net profit of €226.6 million in the previous year.
B/E Aerospace was selected by Air Canada to perform an upgrade of the airline's seating on 143 aircraft. Under the deal, B/E will manufacture and deliver its Spectrum family of coach and first class seating for AC's Hospitality Service and Executive Class on its narrowbody fleet and new Bombardier regional jets. AC's widebody aircraft also will be equipped with Spectrum economy seats. Total value of the deal is roughly $50 million and deliveries are expected to begin later this year.
Jet Airways of India is in final talks concerning an order for up to 15 long-haul aircraft to replace and supplement three A340s leased from South African Airways and four new A330s that will be leased from ILFC beginning next April. Jet is evaluating aircraft such as the A340-600 and 777-300ER and availability of delivery positions in 2007 is a key criterion, CEO Wolfgang Prock-Schauer told ATWOnline in Tokyo at the IATA AGM. "Our priority is to expand our long-haul operation," he said.
Dubai-based Emirates came under concerted attack by rival airline CEOs at an industry forum held during the IATA AGM in Tokyo earlier this week. The extraordinary debate, which lasted more than an hour Monday, started when British Airways CEO Rod Eddington posed a question about whether airlines should or should not be government-owned or protected.
United Airlines appears to have avoided potentially crippling strike action after reaching an agreement in principle on a new contract with 20,000 ramp agents and customer contact employees represented by the International Assn. of Machinists.
Alaska Airlines and its pilots have reached a tentative agreement on a new five-year contract that if ratified will supersede the two-year deal that took effect at the beginning of May after an arbitration decision ( ATWOnline, May 3). According to the carrier, the new contract includes a 20% reduction in both captain and first officer wages as well as work rule changes that will result in "significant productivity improvements." It also allows present employees to choose between the current pension plan and a defined contribution retirement benefit.
Virgin Atlantic reported a pre-tax profit of £68 million ($124 million) for the 12 months ended Feb. 28 compared to a pre-tax profit of £20.9 million in the prior financial year that covered the 10 months ended Feb. 29, 2004 (Virgin changed its reporting period during the year to match that of its 49% shareholder Singapore Airlines). Turnover for the year rose 28.3% to £1.63 billion. Results include activities of Virgin Atlantic Airways and the group's holiday and cargo operations.
Frontier Airlines reported a net loss of $3.7 million for the fiscal fourth quarter ended March 31, which included on pre-tax basis a $2.4 million unrealized fuel derivative gain and a $0.4 million gain from the sale of spare parts and inventory. This compares to a net loss of $5.8 million in the year-ago period. "While we are disappointed with the losses in our fourth fiscal quarter, we are encouraged by some positive trends which have surfaced this quarter," President and CEO Jeff Potter said.
UK and New Zealand initialed a new aviation agreement on air services that removes almost all restrictions on flights between and beyond the two countries. It also applies state aid rules to ensure a level playing field for competition and liberalizes arrangements on a wide range of other issues, including marketing arrangements, ground handling and other operational matters. The previous agreement limited flights between the countries to seven per week for each side.
Alitalia posted a record net loss of €812 million ($1.02 billion) in 2004 against a net loss of €519.7 million in 2003, owing primarily to €308.6 million in restructuring charges.
Assn. of Asia Pacific Airlines reported a 9.9% hike in passengers on international flights to 10.6 million in March. Traffic in terms of RPKs rose 8.1% on a slightly slower capacity increase of 7.2%, resulting in a 0.6-point increase in load factor to 71.7%. International freight traffic in terms of FTKs climbed 6.5%. However, capacity was up 9% and as a result the average freight load factor fell 1.5 points to 64.9%. AAPA represents 17 airlines.
Air China has been beaten out in the battle for control (65%) of Shenzhen Airlines by two "little-known private companies," according to China Daily. Shenzhen-based Huirun Investment Co. and Beijing-based Bright Oceans Corp. outbid nearest rival Air China to take control of the South China-based carrier. The hammer fell at a price of 2.72 billion yuan ($328.5 million). Air China is the second-largest stakeholder in Shenzhen with 25% but said the price was too high.
Iberia told shareholders at its AGM that it intends to pay a "significant" extraordinary dividend out of the capital gains from the sale of its stake in Amadeus, which should bring the airline around €600 million ($750.6 million) ( ATWOnline, April 15). For 2004, Iberia will pay a dividend of 5 euro cents a share as it increased consolidated net income by nearly 51% to €220 million in 2004 from €146 million in 2003.
MAIR Holdings, parent of Mesaba Airlines and Big Sky Airlines, reported a net loss of $1.7 million for the fiscal fourth quarter ended March 31, improved from a net loss of $3.6 million in the prior-year period. "The weather created some operational challenges during January and February, but in the face of those challenges both Mesaba and Big Sky remained focused on executing disciplined processes to achieve these operating results," MAIR President and CEO Paul Foley said.
Darwin Airline increased its capital from CHF4 million ($3.2 million) to CHF10 million earlier this month. The carrier currently operates three daily flights from its Lugano base to Geneva, as well as service to London, Berne and Rome.
PT Lion Mentari Airlines served notice that it intends to be the dominant player in the Indonesian market with an order for up to 60 737s. The order was expected to be signed yesterday in Washington during Indonesian President Susilo Bambang Yudhoyono's visit to the US. The airline earlier signed an MOU for 40 737s, which prompted a counteroffer from Airbus ( ATWOnline, March 1).
Wizz Air said that in its first year of operation it transported 1.2 million passengers. The carrier recently said it has a 40% market share of the LCC business in Poland and 25% in Hungary. Wizz Air has bases in Katowice, Warsaw, Gdansk and Budapest and is planning to open a base in Poznan. Currently it operates a fleet of A320s to 17 destinations on 32 routes.
Air Transport Assn. member airlines flew 56.01 billion RPMs in April, up 3.1% over the year-ago period. Capacity climbed 2.8% to 72.14 billion ASMs and load factor gained 0.2 point to 77.6%. For the four months ended April 30, RPMs increased 6.3% to 215.45 billion, ASMs rose 2.6% to 283.14 billion and load factor jumped 2.7 points to 76.1%.
Although it was affected by high fuel costs, fewer than expected aircraft in operation and the dampening of air travel following the December tsunami, multiple earthquakes off Sumatra and civil unrest in Thailand, AirAsia reported net income of 40.7 million ringgit ($10.7 million) for the fiscal third quarter ended March 31, up significantly over net income of 16.2 million ringgit in the year-ago period.
Boeing and Singapore Aircraft Leasing Enterprise finalized a previously announced sale agreement for 20 CFM56-7B-powered 737s, plus purchase rights for 20 additional aircraft. The order, which was first announced in March ( ATWOnline, March 23), is valued at $1.1 billion at list prices. Deliveries are expected to begin in late 2006 and extend through 2009. Boeing said the 737-800 is the baseline model SALE has specified but the agreement provides for conversions to the 737-700 or the proposed higher-capacity 737-900X.
Sigmar Aviation, an Ireland-based aviation recruitment and services company, is working with Boeing's Alteon training subsidiary to provide Alteon and Boeing customers with "a range of flexible personnel services to support airlines in startup, training, expansion and fleet transition."
SkyTeam offered to make Malev an associate member of the alliance but did not proffer a full partnership because the Hungarian airline had not met its standards, Air France President and COO Pierre-Henri Gourgoun told ATWOnline recently. On Tuesday, oneworld announced an MOU with Malev that should lead to the carrier's entering that alliance next year subject to its meeting membership criteria ( ATWOnline, May 25).
SAS Scandinavian Airlines' credit rating was downgraded yesterday from B1 to B2 for the company's Senior Implied Rating by Moody's Investor's Service. The downgrade is mainly a result of the present overcapacity in the Scandinavian aviation market. Moody's acknowledged that SAS Group has reduced costs successfully through Turnaround 2005 and that yields have stabilized in recent months, but it expects continued yield pressure in the short term. It also has a positive view on SAS Group's continued strong liquidity position and the ongoing program for capital releases.
